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Investing.com - UBS has reiterated a Buy rating on NextEra Energy (NYSE:NEE) with a price target of $84.00, citing positive developments in the recently completed budget reconciliation bill. According to InvestingPro data, the utility giant, currently valued at $150.5 billion, trades at relatively high multiples compared to peers, suggesting investors are pricing in strong growth expectations.
The budget legislation maintained key provisions including safe harbor and tax transferability, which UBS notes provides NextEra with an operational runway extending to 2029 and additional time for safe harbor activities.
UBS highlighted that the final version of the bill removed excise taxes, representing another favorable outcome for the utility company.
NextEra Energy shares made an 8% recovery during intraday trading on July 1 from their low point, according to UBS, which noted the stock currently trades at a 3% premium to the broader Utility group based on the firm’s 2027 earnings estimate of $4.33.
UBS maintains that NextEra Energy presents a positive risk/reward profile following the resolution of this legislation, supporting its continued Buy recommendation.
In other recent news, NextEra Energy has been navigating several developments that could impact its future financial performance. UBS has reiterated a buy rating on the company, maintaining a price target of $84.00, citing favorable Senate tax proposals that provide more flexibility for managing earnings impacts. In contrast, Erste Group downgraded NextEra Energy from Buy to Hold, noting concerns over rising financial debt despite anticipated earnings and dividend growth. Meanwhile, Mizuho (NYSE:MFG) Securities reduced its price target from $73.00 to $69.00, retaining a neutral rating, and highlighted potential risks associated with tariff and tax credit management. The Senate tax proposal, seen as more gradual than the House’s version, is expected to benefit NextEra by aligning with its business planning strategies. UBS believes the proposed changes offer growth opportunities as NextEra transitions away from tax credits. However, the company faces challenges with its financial leverage, as noted by Erste Group, which could affect its financial stability. The ongoing Florida Power & Light rate case and potential legislative changes remain key areas of focus for investors monitoring NextEra’s financial outlook.
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